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Google on Monday announced a significant ramp-up of its infrastructure as a service (IaaS) cloud offering, upping the number of virtual machine sizes available on its platform across the United States and Europe from four to 40.

In addition to the new instance types, the company trimmed the price of its Google Compute Engine service by about 5% and reduced the price of its Google Cloud Storage by 20%. In a blog post, the company also launched a beta program that provides "reduced availability" storage to customers for up to 30% off, but without a service-level agreement (SLA).

The moves signal something of a race to the bottom for cloud providers seeking to offer the lowest cost and widest breadth of cloud services and instance types for customers. Amazon Web Services, for example, last month announced the 21st price reduction for its IaaS cloud products since the company launched its service in 2006. AWS is continuing its geographic expansion as well, having recently added an Australian region on top of its cloud services that are already available in Europe, South America and both the East and West coasts of the United States.

Google has been slowly but surely rounding out its cloud strategy over the past year. The company originally launched a platform as a service (PaaS) application development platform named Google App Engine, but added IaaS offering pay-as-you-go compute and storage options earlier this year.

Today's announcement is the first significant expansion of Google's IaaS product, with the newest instance types including high-memory, high CPU and diskless configurations.

Instance types of Google Compute Engine (GCE) now range from the smallest single virtual core with 3.75GB of memory and 420GB of local disk price for $0.138 per hour in the U.S., to an eight virtual core instance that includes 30GB of memory and up to 2x 1770GB of local disk space, or a diskless option rising to a cost of $1.104 per hour. Google also dropped the price of its original four instance types by 5%.

In addition to the new GCE instance types, the company announced a price reduction of 20% for Google Storage. Object storage in Google's cloud is now $0.095 per GB up to 1TB, then $0.085 per GB up to 9TB, and the price continues to fall as additional storage is placed in the cloud. Ingress of data is free, but egress starts at $0.12 per GB for 1TB.

By comparison, Amazon Web Service's compute instance types start at $0.065 per hour for a 1.7GB memory and 160GB instant storage Linux-based single-core virtual machine, and range up to a high input/output 16 virtual core instance type with two SSD-backed 1024GB instant storage and 60.5GB of memory for $3.10 per hour.

The timing of Google's price reduction announcement comes two days before Amazon is set to hold its first-ever user conference named AWS re: Invent in Las Vegas.

Senior Writer Brandon Butler covers the cloud computing industry for Network World by focusing on the advancements of major players in the industry, tracking end user deployments and keeping tabs on the hottest new startups. He contributes to NetworkWorld.com and is the author of the Cloud Chronicles blog. Email him at bbutler@nww.com and follow him on Twitter @BButlerNWW.